Serviced offices no longer mean a few desks plonked in a spec office block. A new generation of purpose-designed serviced office buildings has arrived.
Serviced offices, in which companies rent space complete with desks, IT equipment and full secretarial and reception services, have come of age in Britain. The UK’s first purpose-designed serviced office building, at Stockley Park business park near Heathrow Airport, opened its doors earlier this month.

Developed by HQ Global Workplaces and designed by Arup Associates, its office floors are just 13.5 m deep rather than the standard 18 m of conventional speculative office buildings that users furnish themselves.

A decade ago, fully serviced offices for rent did not exist in the UK. Last year, the amount of serviced space occupied in London and around the M25 stood at 92 000 m2, according to property consultant Richard Ellis St Quintin. Targets set by serviced office operators suggest that another 240 000 m2 could be developed across the UK over the next two years, resulting in building industry orders worth up to £560m, if the construction costs of the base buildings are included.

The earliest serviced office schemes, pioneered in this country by Regus, were aimed at start-up firms needing temporary space where they could find their feet before moving into regular empty office properties. Nowadays, serviced offices are targeted at large multinational corporations that want to set up branch offices in new locations. In other cases, established firms are looking to set up project offices for six months or longer. And in a few cases, company chairmen want to establish their own personal office suites in prestigious city-centre premises. Customers tend to be in the fast-moving IT or communications sectors, followed by professional firms, human resources consultants and government.

The common thread is that such companies want offices up and running in as little as 24 hours. For this, they are prepared to pay extra charges to the operating companies that organise the fitting-out, manage overheads and lay on services such as reception, secretarial work and post handling.

Colin Peck, spokesman for Regus, says: “The current trend is for big institutions to outsource their accommodation. This gives them flexibility and freedom from long-term commitments. We offer them fixed costs with a single bill with everything up front except their telephone bills. This allows them to budget in advance and limit their risk in setting up new premises and projects.”

Peter Kershaw, UK managing director of HQ Global Workplaces, the US market leader, adds: “What customers want more than anything is flexibility. They want an easy-in, easy-out solution to their accommodation, with no long-term leases and dilapidation schedules when they leave.”

The serviced office market worldwide is dominated by these two outfits. The more established of them is HQ Global Workplaces, formerly HQ Business Centres, which has been running for 32 years and now has 300 centres worldwide. The UK subsidiary is responsible for all of Europe.

In comparison, British company Regus is a brash 10-year-old upstart. Yet, after extraordinary growth that has made it one of the world’s fastest growing private companies, Regus now rivals HQ, running more than 250 centres in 43 countries.

Regus plans to keep up its phenomenal growth pattern by opening another 24 new centres, averaging 2600 m2, in the UK this year, and another 25 in 2001. For its part, HQ plans to open another 15-20 centres in the UK over the next couple of years.

Using a back-of-the-envelope calculation, these figures suggest a total annual construction workload of up to £280m in building and fitting out serviced offices, including professional fees.

What is certain is that there is more scope than ever for the industry to service the serviced office market. As Paul Brewster of property consultant GVA Grimley says: “We see enormous growth potential in serviced offices. Demand will come if operators are listening to their customers. In addition, I see quite a demand for bespoke serviced offices, with buildings designed for specific sectors such as media, IT and professional firms.”